Indian Diaspora - Civil Society Partnership Conference

At New Delhi on the 6th & 7th of Jan 2004.

1. The Challenge

Even after 56 years of Independence, as per UNIDO, WHO, UNDP and the World Bank, nearly 600 million of the Citizens of India are not literate [based on the international definition of the 3R's], 440 million are below the poverty line [based on a minimum requirement of Rs. 45 or US$ 1 per day] and nearly 300 million are unemployed, [our estimates]. About 45 million are registered with the employment exchanges.

One of the biggest reasons for the above is the very low investment in education and training, at hardly 2.5% of GDP. This needs to be increased by at least four times, to 8 - 10% of GDP or nearly US $ 40 - 48 billion per year from about US $ 12 billion per year. Education needs new investments of nearly Rs. 1,00,000 crores to Rs. 2,00,000 crores per year

Studies and experiences of developing and developed nations clearly points to the advantages of a 'One Point Agenda' of 100% Literacy and relevant education & training for the youth in particular and the employable age group of 25 to 55 years, in general.

The advantages of education and training need to be highlighted as explained on page 15 of our booklet, under 'Purpose of education', as it has a direct bearing both on economic as well as on social factors.

The present focus in the Indian Educational system is mostly on higher education. Nearly 94% of the youth 'drop-out', between class 1st to class 12th. Please see details on page 20 of the booklet. The balance 6% seem to have only seven options for further studies, i.e., Arts, Commerce, Science, Law, Management & I.T., Engineering and Medicine. Out of this nearly 84% opt for Arts, Commerce and Science, which in today's economic scene may not be very relevant. That leaves only 16% of 6% or about 1% of the total 29 million who enter the main stream education system in India!

This needs to be changed, as the focus of education should also be to assist and help the balance 94% of the population who do not make it past the 12th Class.

Like in I.T. and software, our work-force should be trained to world class standards, so that Indian manpower can be of use any where on the globe and in India in world class organizations and in multi-nationals, both Indian and foreign.

2. Private Enterprise - Civil Society participation

World wide, education as an enterprise, is nearly 500% the size [about US $2500 billion] of software and I.T. [about US $ 530 billion]. India needs to take note of this as an opportunity.

Education is a very big employment generator and forces countries to improve infrastructure trade and business.

The state governments as well as the central government are running fiscal deficits totaling nearly 11% of GDP, so they have very little funds for long term investments in education and training. The field should be opened for private and civil society as well as for NRI's and PIO's participation with benefits of tax-free involvement and participation for the next 25 years or till we reach an acceptable levels of literacy, employment and poverty.

The present requirements in the areas of education and training should be focused on domestic & foreign students cover the following areas of activity

For Domestic Students

100% functional primary literacy

Secondary education leading up to high school

Enterprise skills education, ESD, between class 1st to class 12th

Vocational education & training, VET, for age groups 15 to 25 years.

We are NOT discussing higher education as most of the emphasis in India is ONLY on higher education

For Foreign Students / NRI's / Domestic Students

School education to international standards

College education to international standards

Higher & Technical education to international standards

3. NRI's can be partners in education & training

This partnership can be divided into two parts:-

Part 1 - Direct participation to finance tax-free low-interest infrastructure 30-year bonds of interest rates between 3.5% to 4.5% or say 200 basis points higher than the LIBOR inter bank rate. This could be a source of low-cost long-term funds to be used both by the central as well as the state governments to fund infrastructure for education and other needs of the economy.

Part 2 - Allow NRI's to invest in education, as a business and an enterprise, both for domestic as well as for foreign students, as explained above. Tax breaks of at least 15 to 20 years, from the year of commercial start up, should be given as an incentive.

4. Role of the state and central Governments

The central government should work as a facilitator rather than a controller.

Maximum leeway should be given to state governments to run their education programs in primary, secondary and high schools.

Higher education should not be subsidized by any government, however they may give grants and scholarships to people below the poverty line and those from the weaker sections of society. Such institutions can charge higher fees from the well-to-do, and use the extra funds to help the needy. Some deserving sections of people may even get free education and/or scholarships.

The UGC controls University education and has a budget of about Rs. 3000 crores per year. The AICTE controls technical and higher education.

Nearly Rs 3000 crores are spent by the youth for the entrance examinations of the seven IIT's and the top 20 management schools of India!

Nearly Rs. 40,000 to 50,000 crores per year is remitted, directly or indirectly, for the 1,80,000 Indian students studying overseas! Indians invest nearly Rs. 50,000 crores every year for the import of nearly 800,000 kgs. of gold. There is therefore enough money available in India, for education as well in areas, which are perceived to be important by the people of India.

Private investments should be encouraged in IIT like and IIM like institutions. Presently only 1.5% of the applications are accepted, as compared to nearly 10% in Harvard, MIT, Stanford, Oxford, Cambridge and other colleges of higher and technical learning. China is planning to invest in nearly 100 IIT like institutions!
Capitation fees will not-go-away by controls and legislation but ONLY by deregulation and freedom. Free market forces should act by bringing in intense competition and excellence in education and training. Controls and legislation have failed in the last 56 years.

The present system of education hardly uses 5% of the human brain, see page 18, of the booklet. It concentrates on IQ development, which is only 33% of the human character. If ESD and VET are introduced it will develop EQ and SQ in the youth, both of which account for nearly 66% of the human character and also results in much better values and ethics in the youth.

5. Role of vocational education & training, VET

Presently the importance of VET has NOT been understood, by the stake-holders of the Indian economy. In most developed countries nearly 95% of the youth between the ages of 15 to 25 years, learn a trade or a skill or a competence. In India this figure is less than 1%.

Nearly 3% to 5% of the population should be taking some sort of VET program at any given time, this would translate to about 30 million to 50 million people per year.

This is not the case in India. In fact we are discouraging our artisans in villages to improve their skills, thereby loosing some world-class skills and know-how of ancient India!

In India, all such training is regulated by the Ministry of Labour and employment. Some deregulation has taken place but not enough.

Presently some VET courses are conducted by the ITI's in many states of India. The syllabus needs revamping, the scope of the courses need to be enlarged. The delivery systems need to be modernized, privatization is essential.

In India most of the 300 million are NOT employable. VET will help for starting small and medium businesses as well as for jobs within as well as for the international markets.

Only in I.T. and software can one find world class training facilities in India. But I.T. accounts for only 1.5% of the world GDP and about 2.5% of India's GDP. We need to develop skill sets for the balance 98.5% of the world economy, in all areas of enterprise. Please see pages 19 as well as pages 22 to 25 in our booklet for details. You can download the booklet freely from our web site at www.wakeupcall.org

[ Abstract of the paper presented by Krishan Khanna of i Watch, on the 6th and 7th of January, 2004 for the IDT - GESS, Indian Diaspora - Civil Society Partnership Conference, held at the Indian Habitat Centre at New Delhi]